This paper evaluates the Absolute Priority Rule and a new legal means for its application by the Courts that creates enormous opportunities for profitable financial schemes. In particular, a 2016 case precedent effectively applying the APR dogma is explained that enables taking property away...

This research provides insights on puzzling exchange rate phenomena. Empirical support is supplied for forward rates incorporating a small probability of a large spot decline when a current account deficit exists. Investors are found to expect countries to be more likely to choose devaluation...

This research develops a theoretical model of current account deficits that explains the effects of having to reverse such imbalances. The theory defines precise mathematical relationships which should exist between the balance of payments, exchange rates, interest rates, inflation, income, and...

This paper analyzes market mispricings as a function of arbitragers' confidence in their valuation estimates and subjective predictions about the future trades of other investors. New insights on the nature of investor psychology are revealed that help explain market cycles and anomalies like...

This paper models market mispricings as a function of subjective predictions about the endogenously determined future trades of other investors. Utilizing only a very general set of very unrestrictive assumptions, a single boundary condition with only a few variables is deduced that facilitates...

This paper demonstrates analytically how short sellers can put non-transitory downward pressure on the stock market prices and intrinsic values of companies that need to raise external capital because of insufficient internal liquidity. The model helps explain anomalous empirical findings in the...

This research utilizes the most recent research in psychology to analyze causes of financial cycles within the context of applied financial theory. Such cycles are shown to be consistent with both human nature and efficient markets, but they are also demonstrated to contribute to mispricing in...

This research develops an analytical model of the incentives created by allowing credit default swaps to be contracted with virtually no regulation. The incredible growth in the volume of those financial contracts since they were deregulated in 2000, as well as the credit bubble and subsequent...